APPRAISAL OF THE EFFECTS OF COLLATERALIZATION OF LOANS ON ACCESS TO BANK CREDITS: MORTGAGE IN PERSPECTIVE

Abstract

One of the functions of commercial banks is to provide credit facilities like loans to customers.  Access to bank loans is extensively predicated on the borrower’s capacity to furnish the required collaterals to secure the loan. Mortgage is a major form of collateral security for bank loans. For the lending banks, mortgage security is designed to safeguard them from suffering loss resulting from non-repayment of loans, while the borrowers are expected to furnish the mortgage property. The question now is: to what extent has mortgage security affected access to bank loans?  This article, inter alia examines the effects of mortgage on access to bank loans. It recommends viable ways of enhancing and accelerating mortgage secured access to bank credits. This work will be beneficial to corporate entities and individuals who may be interested in accessing bank loans. The research adopts doctrinal approach with primary and secondary sources of data including statutes, judicial precedents, textbooks, journals and internet sourced materials. It is recommended that a charge by way of mortgage should be placed on business capitals and assets acquired with bank loans, in the event of the borrower’s inability to afford a collateral for mortgage security prior to the lending.